A federal judge refuses to let an arbitrator determine jurisdiction in a controversy over whether the documentary disparaged the late pop singer.
The dispute over Leaving Neverland, HBO’s documentary will stay in open court for now. Following a hearing last week, a federal judge on Tuesday decided to reject a motion from the Michael Jackson Estate to immediately throw the case to an arbitrator.
The Michael Jackson Estate sued HBO shortly before Leaving Neverland premiered on March 3. The plaintiff alleges that the film constitutes a breach of a non-disparagement clause in a 27-year-old agreement, one that provided the pay network with rights to air a televised concert following the release of Jackson’s album, Dangerous. But the Michael Jackson Estate doesn’t actually wish to litigate in open court. Instead, Jackson’s heirs invoked an arbitration clause in that old deal and aimed to get a Los Angeles Superior Court judge to compel a showdown before the American Arbitration Association..
In response, HBO had the case removed from state to federal court in California. Characterizing the Michael Jackson Estate’s whole legal endeavor as a “transparent effort to bolster their publicity campaign against the documentary” by skirting legal precedent against posthumous defamation claims, HBO denied there was any enforceable agreement that hadn’t expired and actually covered Leaving Neverland. The AT&T subsidiary further argued that any over-reading of the 1992 contract would violate both its due process rights as well as the First Amendment.
From there, the parties fought a battle inside the larger legal war to resolve the question of where the dispute would be adjudicated. While the issue of forum may seem like a boring procedural issue, it has the potential of determining the entire case because if the arbitration provision is inoperable, so too likely are the confidentiality and non-disparagement clauses that provide the basis for claims by the Michael Jackson Estate.
HBO argued that under the Federal Arbitration Act, the federal judge had to decide the “gateway issues of validity and arbitrability.” Such analysis would turn, according to the network’s lawyers, on whether HBO clearly and unmistakably manifested an intent back in 1992 to have an arbitrator determine jurisdiction. HBO also brought up old rules (since amended) by the AAA with respect to the invocation of jurisdiction.
The Michael Jackson Estate framed such arguments as “classic tautology,” opining in a court brief that “it assumes the very conclusion that HBO wants an adjudicator to reach in this dispute, i.e., that there are no remaining obligations under the Agreement.”
U.S. District Court Judge George H. Wu doesn’t see clear and unmistakable evidence regarding arbitration. He’s both denied motions to remand the case back to state court as well as compel arbitration.
That represents an initial win for HBO.
That said, the judge is directing the parties to deliver supplemental briefing on the issue of arbitration. The next couple of months will have the two sides exploring the meaning of that 1992 deal. Wu then will come to a new decision about the prospect of arbitration. If HBO wins, it likely won’t have to even get into the issue of whether Leaving Neverland damaged Michael Jackson.
Michael Jackson’s estate will have to keep battling HBO over the network’s “Leaving Neverland” documentary in open court for now, a California federal judge has ruled, denying a bid by the estate to have the breach of contract claims handed over to an arbitrator straight away or remanded to state court.
U.S. District Judge George H. Wu on Friday shot down the estate’s request to have a state court handle the case, finding that the language of a 1992 agreement does not indicate that any disputes should be handled only by state court, as the estate had argued. He also ruled that he should be the one to make a determination on arbitration, according to his one-page order, which largely adopted a tentative ruling he had issued the day before.
Judge Wu did say he would allow supplemental briefing on the motion to compel arbitration and set a hearing on the matter for June 24.
“The motion to remand is denied, and the motion to compel arbitration is denied insofar as it contends that the gateway issue of arbitrability is to be decided by the arbitrator rather than the Court pursuant to clear and unmistakable evidence,” Judge Wu said.
HBO said in a statement on Wednesday, “We are pleased the judge agreed with us that he is the decision maker in the first instance.”
In HBO’s documentary “Leaving Neverland,” which first aired in March, Wade Robson and James Safechuck accuse Jackson of raping them when they were children. They said the abuse happened while their families were staying at Jackson’s 2,800-acre ranch. Both men had previously testified in defense of Jackson.
Jackson’s estate filed its $100 million suit against HBO in February, ahead of the documentary’s release. The estate is taking issue with the concert footage used in “Finding Neverland,” alleging that HBO breached its contract with the estate by including it. The estate also claims the documentary has harmed Jackson’s legacy, according to court filings.
The suit was filed in Los Angeles Superior Court, but it has since landed in federal court.
In April, Jackson’s estate asked Judge Wu to either ship the case back to California state court or compel arbitration. The estate claimed that its agreement with HBO specifies that Los Angeles County Superior Court should be the “exclusive” forum for any dispute, according to court filings.
As an alternative, the estate requested that the court compel arbitration of its claims pursuant to an arbitration provision in that agreement, per the filings. And an arbitrator should be the one to decide questions of arbitrability, the estate argued, citing the rules of the American Arbitration Association. The current version of those say an arbitrator should have the power to rule on his or her own jurisdiction, according to the filings.
Judge Wu disagreed Friday, finding in his tentative ruling that the agreement’s “plain language” does not support a finding that the parties intended that court to be the “only forum for other disputes.”
“The parties’ instant disagreement is not about who should serve as the arbitrator, but rather whether arbitration should be compelled in the first instance,” Judge Wu said. “Therefore, the court would deny plaintiff’s motion to remand.”
And he wasn’t immediately convinced by Jackson’s estate’s arguments that the issue of arbitrability be decided by an arbitrator, he said, noting that the agreement was entered into before those rules applied. He said the parties should discuss this matter further during the upcoming hearing.
“Because the court has not yet decided whether or not an arbitrator will decide arbitrability, it will hold off from addressing the arguments in regards to the arbitrability issue,” he said in his tentative ruling.
Counsel for Jackson’s estate declined to comment Wednesday.
Michael Jackson’s estate is represented by Howard Weitzman, Jonathan P. Steinsapir and Zachary T. Elsea of Kinsella Weitzman Iser Kump & Aldisert LLP and Bryan J. Freedman of Freedman & Taitelman LLP.
HBO is represented by Daniel M. Petrocelli and Drew E. Breuder of O’Melveny & Myers LLP and Theodore J. Boutrous Jr. of Gibson Dunn & Crutcher LLP.
The case is Optimum Productions et al. v. Home Box Office et al., case number 2:19-cv-01862, in U.S. District Court for the Central District of California.
SOURCE: Hollywood Reporter